Electronic design automation firm Synopsys late Tuesday badly missed Wall Street's targets for its fiscal third quarter and offered mixed guidance. Synopsys stock dropped in extended trading.
The Sunnyvale, Calif.-based company earned an adjusted $3.39 a share on sales of $1.74 billion in the quarter ended July 31. Analysts polled by FactSet had expected earnings of $3.80 a share on sales of $1.77 billion. In the year earlier period, Synopsys earned an adjusted $3.43 a share on sales of $1.53 billion.
For the current quarter ending Oct. 31, Synopsys forecast adjusted earnings of $2.78 a share on sales of $2.25 billion. That's based on the midpoint of its fiscal Q4 guidance. Wall Street had been modeling earnings of $4.50 a share on sales of $2.01 billion. In the same quarter last year, Synopsys earned an adjusted $3.40 a share on sales of $1.64 billion.
The fiscal Q3 report was the company's first since it completed its $35 billion acquisition of Ansys on July 17. Synopsys is the leader in EDA software for chip design, while Ansys is tops in simulation and analysis software.
"Q3 was a transformational quarter," Chief Executive Sassine Ghazi said in a news release. "Against a challenging geopolitical backdrop, we closed the Ansys acquisition — expanding our portfolio, customer base and opportunity. Now more than ever, Synopsys is the mission-critical partner technology R&D needs to design and deliver AI-powered products."
The company's intellectual property business underperformed during the quarter, Ghazi said.
Synopsys Stock Retreats Late
Chief Financial Officer Shelagh Glaser said Synopsys is "taking a more conservative view of Q4, while guiding another consecutive year of profitable growth."
In after-hours trading on the stock market today, Synopsys stock fell 18% to 495. During the regular session Tuesday, Synopsys stock dipped 0.8% to close at 604.37.
Synopsys stock is in a flat base with a buy point of 651.73, according to IBD MarketSurge charts. Further, Synopsys is on the IBD Tech Leaders list.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
